Can an island economy overcome hurricane devastation to seize the opportunity for energy democracy?
Ingrid Vila is an engineer and director of Cambio, a Puerto Rico based nonprofit. In a coalition called Queremos Sol – we want sun – Ingrid works with many other organizations on the island and off to prioritize community-owned, local renewable energy. Nearly two years after Hurricane Maria destroyed the island’s electrical grid, an influx of federal recovery dollars may provide the catalyst to rebuild the island’s economy by reimagining its grid, starting with solar on rooftops and local energy storage.
In this May 2019 interview, ILSR’s Director of Energy Democracy, John Farrell, and Ingrid discussed the enormous opportunity, and the pitfalls the island must avoid to seize its chance for energy democracy. Listen to this conversation and explore more highlights and resources, below — including a transcript.
Why Was Hurricane Maria So Disruptive?
More than anything, the sheer power of Hurricane Maria––a category 5 hurricane when it made landfall––was what destroyed Puerto Rico’s electricity grid. However, several factors made the destruction even worse than it could have been. In particular, little attention paid to the impact of climate change meant continued reliance on a power system reliant on vulnerable, centralized infrastructure and less-than-competent centralized leadership.
Political intervention and corruption in the publicly-run utility, PREPA, had lessened grid maintenance work, diverted essential funds, and caused many experienced workers to leave. Key utility leadership roles were often filled with political appointees rather than qualified men and women. Additionally, the grid system was highly centralized, with major population centers in the north served by vulnerable, mountain-crossing transmission lines from the power production area in the south. Finally, the natural disaster came after more than a decade of an economic depression (driven by federal policy change) and subsequent austerity measures.
How Can Puerto Rico Reach a New Energy Paradigm?
In her presentation to the Black Start conference, Ingrid had described how the energy system of the future must include “a power system transformation under public ownership, and a commitment to 100% renewable energy through a shared governance model rooted in local ownership and participation.”
Queremos Sol is a broad coalition of on- and off-island organizations pursuing this system transformation. In English “we want sun,” the coalition arose in Spring 2018 in response to the government’s suggestion that privatization would solve “all our problems.” Members include PREPA union workers, PREPA managers, Sierra Club, university professors, and others.
Key elements of the transformation include:
- Consider energy a common good and a human right, rather than market commodity.
- Reject privatization because it limits the integration of citizens in decisions and in the opportunity to build local wealth.
- Tap local innovation to achieve democratic participation, risk reduction, and better public health.
One key development in tapping local ingenuity are rules supporting deployment of microgrids. Puerto Rico’s energy overseer, the public Energy Bureau, released landmark microgrid rules in May 2018, but they’ve languished due to utility stalling on interconnection rules.
Where Will The Money Come From?
The utility and commonwealth government bankruptcies blocks access to two major sources of money to support energy system transformation, but there are other options. Federal recovery funding is expected and could be used to jumpstart integration of renewable energy and storage (as discussed in Local Energy Rules episode 77 with Marcel Castro Sitiriche). Combined with funds from the Rural Utility Service, utility customers, private investors, and philanthropy, Ingrid believes as much as $1.2 billion per year over five years could support energy democracy.
Instead, the governor and other leading politicians intend to invest in gas infrastructure and to require all existing power plants to become dual fuel, oil and gas (Governor Rosselló was at a natural gas conference just downstairs from the Black Start event Ingrid and John attended in March). The proposal would lock in expensive fossil fuel combustion for at least twenty years, and significantly curtail funding for energy sector transformation.
A Puerto Rican Green New Deal?
Some news coverage has described the recent energy policy (Bill 1121) as a Green New Deal for the island, but Ingrid disagrees. While it does include a renewable energy standard, removing waste burning from the renewable definition, and some policy fixes for rooftop solar, it fails on several counts. For one, it supports privatization and investments in fracked gas infrastructure, the latter of which would divert most forthcoming federal recovery funds. For another, it ignores the history of the island’s utilities failing to meet existing renewable energy goals. Ultimately, Ingrid gave the new law a failing grade:
“Really what is behind all this is the privatization of an entity through a process that lacks transparency, lacks a benefit cost analysis, or any real utility transformation. Instead it’s just a change of hands from a public utility to a private utility with minimal real transformation.”
What Benefits Come from an Energy Democracy Approach?
Islanders lose nearly $2 billion per year to pay for the existing power system reliant on imported oil, explains Ingrid. Enabling ordinary people to participate in the energy system, to generate wealth, is a key tool to reverse “rampant” inequality in Puerto Rico and to strengthen the local economy.
In addition to economic benefits, the distribution of ownership would build local capacity, expand shared governance, and create a more transparent governance structure, says Ingrid. Unfortunately, while this concept is broadly popular with ordinary Puerto Ricans, it’s not the route the government is pursuing:
“You’d think it would be an obvious option for anyone thinking of how to transform the utility. It’s not the obvious option being pursued by government.”
Can Communities Go It Alone?
Local renewables can provide energy for less cost than the centralized, polluting utility can, acknowledges Ingrid, but so far community power systems have mostly been supported by philanthropy. The question is how to structure the financial products so that they work for communities.
Ingrid provided a few potential tools that Queremos Sol has focused on. Financial cooperatives could provide one model, able to access federally backed loan guarantees. Community Development Block Grants could work, for example, and the island will receive a “considerable amount” through disaster recovery funds. The structure of financing for the recover is, according to Ingrid, “where the most important piece of the puzzle lies.”
How Can We Help and What Have You Learned?
The biggest threat to Puerto Rico’s recovery is the pending federal bankruptcy case. The restructuring of the island’s debt could richly reward bondholders while having a severe impact on energy rates and renewable energy. As an example, a recent proposal would impose a surcharge on all electricity used, whether sold by the utility or self-generated.
Want to help? Write a letter asking Federal District Court Judge Laura Taylor Swain to protect Puerto Ricans from bankruptcy agreements that penalize islanders from becoming more energy self-reliant.
As to what others can learn from Puerto Rico, Ingrid is bullish on the power of people to solve the problem.
“There is incredible power to be harnessed at the community level…a transformation of the energy sector, we have to provide the resources for communities, for small businesses to lead the transformation. People are very clear about energy system transformation and the potential to provide the island with improved quality of life, reduced vulnerability, etc…People are ready to take action, ready to solve their own problems”
- Ingrid’s Black Start presentation
- Marcel’s project – Call to Action: Puerto Rico Energy Policy Brief
- Hurricane Maria Effects on Puerto Rico Electric Power Infrastructure by Marcel Castro Sitiriche
- Puerto Rico’s New Microgrid Regulations
- Puerto Rico Legislature Approves 100 Percent Renewable Energy Target
- John’s commentary on Puerto Rico in October 2017 – Can Puerto Rico Overcome a Colonial Past to Build a Greener Grid?
- John’s presentation to the Black Start conference in San Juan in March 2019 – Video: Accountability and Ownership Matter for Puerto Rico’s Future Grid
This is the 78th edition of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.
This article originally posted at ilsr.org. For timely updates, follow John Farrell or Marie Donahue on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update. Also check out over 70 episodes of the Local Energy Rules podcast!
John Farrell is the Director of Democratic Energy at the Institute for Local Self-Reliance and widely known as the guru of distributed energy.John is best known for his vivid illustrations of the economic and environmental benefits of local ownership of decentralized renewable energy.John Farrell can also be found on Twitter @johnffarrell, or at [email protected]